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Growth, fluctuations and technology in the U.S. post-war economy

  • Jesús Rodríguez López

    ()

    (Department of Economics, Universidad Pablo de Olavide)

This paper explores several issues concerning how technology affects growth and fluctuations during several U.S. postwar series. The nature of technology is divided into neutral progress and investment-specific progress. Accounting for several changes in the first and second order moments of these series (the slowdown of productivity in 1974, the moderation of 1984 and the resurgence in productivity after 1994), I find that the contribution of investment-specific progress to growth has increased over time. I also find that neutral progress is crucial in explaining the cyclical component of output (before and after 1984), contrary to results found in related literature. However, the shocks to investment-specific progress have played an increasing role in output and other macroeconomic variables. Finally, I conclude that moderation in the macroeconomic series can be associated with technology. In sum, the quality of technological processes affecting long run growth and fluctuations has changed over the past decades.

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File URL: http://www.upo.es/serv/bib/wps/econ1001.pdf
File Function: First version, 2010
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Paper provided by Universidad Pablo de Olavide, Department of Economics in its series Working Papers with number 10.01.

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Length: 22 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:pab:wpaper:10.01
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  1. Margaret M. McConnell & Gabriel Perez Quiros, 1997. "Output fluctuations in the United States: what has changed since the early 1980s?," Research Paper 9735, Federal Reserve Bank of New York.
  2. Andres Arias & Gary D. Hansen & Lee E. Ohanian, 2006. "Why Have Business Cycle Fluctuations Become Less Volatile?," NBER Working Papers 12079, National Bureau of Economic Research, Inc.
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  9. Giorgio Primiceri & Alejandro Justiniano, 2006. "The Time Varying Volatility of Macroeconomic Fluctuations," 2006 Meeting Papers 353, Society for Economic Dynamics.
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  11. Olivier Blanchard & John Simon, 2001. "The Long and Large Decline in U.S. Output Volatility," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 135-174.
  12. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
  13. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
  14. Jason G. Cummins & Giovanni L. Violante, 2002. "Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 243-284, April.
  15. José-Víctor Ríos-Rull & Frank Schorfheide & Cristina Fuentes-Albero & Raul Santaeulalia-Llopis & Maxym Kryshko, 2009. "Methods versus substance: measuring the effects of technology shocks on hours," Staff Report 433, Federal Reserve Bank of Minneapolis.
  16. Michael R. Pakko, 2001. "What happens when the technology growth trend changes?: transition dynamics, capital growth and the "new economy"," Working Papers 2001-020, Federal Reserve Bank of St. Louis.
  17. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1998. "The Role of Investment-Specific Technological Change in the Business Cycle," RCER Working Papers 449, University of Rochester - Center for Economic Research (RCER).
  18. Jonas D. M. Fisher, 2006. "The Dynamic Effects of Neutral and Investment-Specific Technology Shocks," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 413-451, June.
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